Define what the headline describes
Ask whether the discussion concerns the operations, shares or selected assets. Identify the relevant date and the assumptions behind the figure. Business value, equity value and the seller’s eventual receipts should be labelled separately so the conversation does not shift between them unnoticed.
Build a simple proceeds bridge
Illustration only: an assumed £1 million enterprise value, less £200,000 debt and plus £50,000 qualifying cash, gives £850,000 before other adjustments. This is arithmetic, not a valuation opinion or a statement of what qualifies as debt or cash in your deal. The agreement may include working-capital or other adjustments. Tax and transaction costs are additional questions for the relevant advisers.
Look at when the money arrives
A buyer may propose payment at completion, deferred consideration, an earn-out or a combination. An amount conditional on future events is different from cash available on completion. Ask for a clear payment schedule and model the relevant scenarios. The solicitor should review the legal protections and conditions.
Prepare before naming the price
Gather recent accounts, management figures, customer concentration information and a documented explanation of owner-related costs. Explain changes in trading and the resources needed to sustain earnings. A valuation can then be scoped around evidence rather than an unsupported target. It does not guarantee a buyer, price or completion.
Prepare for the conversation
- Distinguish enterprise value, equity value and receipts.
- List debt, cash and working-capital questions.
- Show immediate and conditional payments separately.
Further reading: British Business Bank: selling your business.
General preparation guidance, not a valuation opinion or legal or tax advice. Any assignment is subject to an agreed scope, suitability and intended-use review. Examples are illustrative, not client cases.